Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Legal Services Commissioner v Scroope [2011] NSWADT 187
• Hearing dates: 7 June 2011
• Decision date: 03 August 2011
• Jurisdiction: Legal Services Division
• Before: D Patten, Deputy President

Decision

1. The claim for privilege is upheld in respect of documents 8, 18, 21, 24, 25, 27, 31, 50, 66, 67, 68 and those documents which I have placed in a sealed envelope may be returned to the applicant.

2. The claim for privilege is overruled in respect of documents 28, 33, 34, 35, 36, 37, 54, 59, 65 and those documents which I have placed in an unsealed envelope may be inspected and photocopied by the parties.

• Catchwords: Claim for legal professional privilege - circumstances where claim overruled
• Legislation Cited: Administrative Decisions Tribunal Act 1997; Evidence Act 1995
• Cases Cited: Australian Securities and Investments Commission v Southcorp Ltd 46 ACSR 438; Gillies v Downer EDI Ltd [2010] NSWSC 1323; New Cap Reinsurance Corpn Ltd (In Liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258
• Category: Interlocutory applications
• Parties: Legal Services Commissioner (Applicant); Mr Philip Scroope (Respondent)
• Representation: Counsel; Ms C Webster (Applicant); Mr T Lynch (Respondent); Ms L Muston (Applicant); Mr T Williams (Respondent)
• File Number(s): 092010

REasons for decision

1 LEGAL SERVICES DIVISION (D PATTEN (DEPUTY PRESIDENT)): On 7 June 2011 I heard an application by the respondent to overrule a claim by the applicant that he is entitled to claim privilege in respect of documents produced to the Tribunal pursuant to a summons for production. The nature of the privilege claimed is that of legal professional privilege within ss 118 and 119 of the Evidence Act 1995 (Evidence Act). Those sections provide:

118 Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a) a confidential communication made between the client and a lawyer, or

(b) a confidential communication made between 2 or more lawyers acting for the client, or

(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person,

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

119 Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or

(b) the contents of a confidential document (whether delivered or not) that was prepared,

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

2 The privilege created by ss 118 and 119 may be lost in the circumstances stated in s 122:

122 Loss of client legal privilege: consent and related matters

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3) Without limiting subsection (2), a client or party is taken to have so acted if:

(a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person, or

(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4) The reference in subsection (3) (a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party, or of a lawyer of the client or party, unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.

(5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because:

(a) the substance of the evidence has been disclosed:

(i) in the course of making a confidential communication or preparing a confidential document, or

(ii) as a result of duress or deception, or

(iii) under compulsion of law, or

(iv) if the client or party is a body established by, or a person holding an office under, an Australian law-to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held, or

(b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person, or

(c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

(6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness's memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers).

3 Section 131A of the Evidence Act has the effect inter alia of applying s 119 to a requirement to disclose documents produced in answer to a summons and its applicability to proceedings before this Tribunal is provided for by s 125 of the Administrative Decisions Tribunal Act 1997 .

4 The documents encompassed by the summons were, as I have indicated, duly produced and taken into the custody of the Tribunal. There remain 20 (the subject documents) in respect of which privilege is sought to be maintained, all of which relate in some way to the retainer by the applicant of a Ms K Rosati to prepare expert reports in respect of the issues between the parties. Four such reports were served on the respondent.

5 All of the subject documents were available to Ms Rosati when she prepared the reports and it is to her that the summons was directed.

6 The principles governing the application of the relevant law to the facts have been discussed in many cases.

7 Lindgren J in Australian Securities and Investments Commission v Southcorp Ltd 46 ACSR 438 restated in para 21 "principles which I did not understand to be in dispute". He said:

(1) Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 ChD 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 (" Interchase ") at 151 per Pincus JA, at 160 per Thomas J.

(2) Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501 (" Propend" ); Interchase , per Pincus JA; Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70 at [17].

(3) Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness's own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161--162 per Thomas J.

(4) Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents: cf Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 481 per Gibbs CJ, 487--488 per Mason and Brennan JJ, 492-493 per Deane J, 497--498 per Dawson J; Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 at 98 per Deane, Dawson and Gaudron JJ, 109 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 (" ACCC v Lux ") at [46].

(5) Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents: Interchase at 148--150 per Pincus JA, at 161 per Thomas J.

(6) It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report;

8 In the recent case of Gillies v Downer EDI Ltd [2010] NSWSC 1323, Garling J quoted with approval the statement of White J in New Cap Reinsurance Corpn Ltd (In Liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 at [53]:

The question is not merely whether it could be said that the privileged materials were used in such a way that they could be said to influence the content of the report, but whether it could be said that they influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining privilege in those materials, such as, where it would be unfair for the party to rely on the report without disclosure of those materials ... privileged communications between an expert and the party's lawyers whereby material information is provided to the expert in the form of assumptions or documents may well influence the content of the report. However, an expert's report is required to state what material and assumptions are relied on. Use of a final report, which refers to such materials and assumptions, is not inconsistent with maintaining confidentiality in the communications which produced the final product.

9 The subject documents which were numbered (and have been inspected by me but not of course by the respondent or his legal representatives) were in a sealed envelope. I shall deal with them for convenience in the order in which they appear in the annexure marked 'F' to the affidavit of the applicant affirmed 11 March 2011.

10 Documents 8, 18 and 21: Documents 8 and 18 are copies of notes prepared by Ms Rosati of conferences respectively held on 17 December 2008 and 9 February 2009 with Ms Lynda Muston and Ms Kerrie Henderson acting as solicitors for the applicant. Document 21 is an email sent by a Ms Tara Ryan, solicitor and Senior Cost Consultant, D G Thompson Legal Costs Lawyers and Consultants, to Ms Rosati on 18 May 2009. All three documents in my opinion are privileged by virtue of s 118 of the Evidence Act. Moreover in my opinion it does not appear that the applicant, by serving Ms Rosati's reports, has acted "in a way that is inconsistent" within s 122 as that expression is discussed by White J in the passages quoted above. Although since 1 January 2009 s 122 is in a different form from s 122 as it was at the time of White J's decision, that does not seem to me to affect the force of his Honour's observations.

11 Documents numbered 24, 65, 66, 67, 25, 68, 27, 28, 31, 33, 34, 35, 36, 37, 50, 54, 59: Whereas documents 8, 18 and 21 related to the provision of advice before commencement of these proceedings on 22 May 2009, all these documents arose after that date.

12 Document 24 contains copies of two emails privileged under s 119 as confidential communications between a lawyer for the applicant and Ms Rosati. It is arguable however that Ms Rosati may have been influenced by the document attached to one of the emails namely that sent by Ms Henderson on 22 May 2009. I would overrule the claim of privilege made in respect of it and would extend that decision to both emails and the document.

13 Document 65 relates to Ms Rosati's handwritten notes on the document forming part of document 24. The notes in my opinion form no basis for a claim of privilege and I reject the claim (see item (3) in the passage from the judgment of Lindgren J quoted above).

14 Although document 66 was apparently compiled by Ms Rosati as a preliminary draft it was seemingly sent to Ms Henderson and thereby became a confidential communication. In my opinion the communication was not inconsistent with the claim for privilege and I would uphold the claim. The privilege extends to document 67 which is a copy of 66.

15 Document 25 contains copies of emails between Ms Henderson and Ms Rosati. They are privileged within s 119 and in my opinion are in no way inconsistent with the claim for privilege. I would uphold the claim.

16 Document 68 is a draft document prepared by Ms Rosati and sent to Ms Henderson. It is similar to documents 66 and 67 and thus constitutes a confidential communication. The claim for privilege in my opinion involves no inconsistency and I would uphold it.

17 Document 27 constitutes notes made by Ms Rosati of a conference with Ms Henderson. As the notes record confidential communications they are privileged. The claim for privilege in respect of the notes does not in my opinion involve any inconsistency on the part of the applicant.

18 Document 28 consists of notes made by Ms Rosati of a telephone conversation with Ms Henderson. The communication is clearly privileged under s 119 of the Act but arguably the claim for privilege in respect of this document is inconsistent with the actions of the applicant in serving the report. I would overrule the claim.

19 Document 31 constitutes notes made by Ms Rosati of a telephone conversation with Ms Henderson. To the extent a claim is made for privilege it should be upheld as the notes record a confidential communication regarding the preparation of Ms Rosati's report and there is no inconsistency in the claim for privilege.

20 Document 33 consists of notes made by Ms Rosati of a telephone conversation with Ms Henderson. It is privileged on that basis as it relates to the preparation of Ms Rosati's reports. However it is arguable I think that there may be some inconsistency between a claim for privilege in respect of this document and the disclosure of Ms Rosati's reports. I would reject the privilege claim.

21 Document 34 is an email from Ms Rosati to Ms Henderson. It is clearly a privileged document but again I think that maintenance of a claim for privilege is at least arguably inconsistent with the actions of the applicant in serving Ms Rosati's reports. I would reject the privilege claim.

22 Document 35 is another email from Ms Rosati to Ms Henderson. Again it is plainly privileged but again I think the privilege has been lost by the actions of the applicant.

23 Document 36 constitutes notes in the handwriting of Ms Rosati of a conference with Ms Henderson and includes a copy draft report with annotations. The document gains privilege from the circumstance that it evidences confidential communications between Ms Henderson and Ms Rosati. However in the circumstances in my view to maintain the privilege would again be inconsistent with the actions of the applicant in serving Ms Rosati's reports and I would overrule the claim.

24 Document 37 constitutes Ms Rosati's notes of a telephone conversation between herself and Ms Henderson. Although again a privileged record, I think the privilege claim should be regarded as inconsistent with the applicant's actions. The communication may arguably have influenced the final report. The claim for privilege is overruled.

25 Document 50 constitutes notes by Ms Rosati of a telephone conversation with Ms Samantha Gulliver in the applicant's office. The conversation related to a report by Mr Gordon Salier and was clearly a privileged communication. There is not I think any basis for suggesting that the communication influenced Ms Rosati's report. I would uphold privilege.

26 Document 54 constitutes Ms Rosati's notes of a conference with Ms Muston, Ms Gulliver, and counsel. Arguably the communication whilst privileged could have influenced Ms Rosati 's subsequent report and I would overrule the claim.

27 Document 59 constitutes notes made by Ms Rosati of a conference with Ms Gulliver and includes a draft report with handwritten annotations. The privileged communication may have influenced the final report and I would overrule the claim for privilege.

28 In the result therefore I make these orders:

1. The claim for privilege is upheld in respect of documents 8, 18, 21, 24, 25, 27, 31, 50, 66, 67, 68 and those documents which I have placed in a sealed envelope may be returned to the applicant.

2. The claim for privilege is overruled in respect of documents 28, 33, 34, 35, 36, 37, 54, 59, 65 and those documents which I have placed in an unsealed envelope may be inspected and photocopied by the parties.

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Decision last updated: 04 August 2011